Post-Financial Crisis, Firms Must Address the Fallibility of Models

Bob Park, CEO, Fincad

Modeling plays a crucial role in the over-the-counter (OTC) derivatives market, determining the approximate market value of equities, options, futures and bonds traded off-exchange. However, given the approximate nature of the valuations, Bob Park, CEO of Vancouver-based valuation and risk management solutions provider Fincad, says not enough attention has been paid to the limitations of models due to a lack of sufficient tests and model validation.

"A key problem in 2007 and 2008 was that peopl